In my previous post on SALCON (http://klse.i3investor.com/blogs/netnets/70160.jsp), the firm is seen as a sub-liquidation stock.
SALCON's shares buy back was commendable as its own shares were acquired below its NCAV.
However, SALCON sold a total of 8 mil shares for nearly RM6 mil on 09 Feb 2015.
Did that move make it a deeper NCAV stock? Let's work out its rough calculation.
Details of shares acquired
RM514,000 (857,100 shares) on 13-16 Jan 2015
RM875,000 (1.39 mil shares) on 30 Dec 2014-08 Jan 2015
RM2 mil (3.48 mil shares) on 15-17 Dec 2014
RM1.53 mil (2.395 mil shares) on 04-12 Dec 2014
RM14,556 (20,000 shares) on 28 Oc 2014
Conclusions
Gross sale: RM6 mil (8 mil shares)
Gross costs of purchase: RM4.95 mil (8.3 mil shares)
Gross profit: RM1 mil or RM0.0015 per share
All in all, the disposal of SALCON's treasury shares created more shareholder value and made it a deeper NCAV stock.
Should I sell my SALCON shares?
Many would suggest that I should sell it since the management disposed its shares.
Wait a second!
Why would one do so as the growth factors are blindingly clear and the management knows how to create additional shareholder value? Most importantly, it remains a marginal ncav stock: undervalued!
I am pretty sure that you know what I suggest here.
In fact, many sub-liquidation stocks with growth factors are potential multi-baggets if you allow them to roll over time.
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